States With The Most Student Debt

States With The Most Student Debt

As the Biden Administration takes new steps, some states in the U.S. are facing significant student debt burdens. After a federal student loan payment pause lasting over three and a half years, approximately 44 million federal student loan borrowers are resuming payments. However, a small fraction of these borrowers is in for a pleasant surprise in October - their student debt is being canceled.

The Biden administration has committed to canceling the debt of an additional 125,000 student loan borrowers, amounting to a total of $9 billion in student loan forgiveness. This announcement follows the Supreme Court's rejection of Biden's earlier $400 billion loan forgiveness plan earlier this summer.

Under the new policies implemented by the Biden administration, nearly 3.6 million borrowers have already received approval for a collective sum of $127 billion in debt cancellation, as reported by the Education Department.

Which U.S. States Have the Highest Average Student Loan Debt?

When it comes to states with the highest average student loan debt, Washington, D.C. takes the top spot, with borrowers facing an average debt of $54,856. Maryland comes in second place, where 808,600 borrowers have an average debt of $42,666.

Following closely behind in the top five are Georgia, Virginia, and Florida, with average debts of $40,438, $38,679, and $37,848, respectively, as reported by the Chamber of Commerce. It's worth noting that since the pause on student loan payments began in March 2020, federal student loan debt has seen an increase of $102 billion, according to the Department of Education.

Distribution of Student Debt Across Age Groups

The distribution of student debt across various age groups reflects the financial challenges faced by individuals at different stages of life. Student loan debt is a significant financial burden for many Americans, and it varies significantly based on the age of the borrowers.

This distribution shows how educational debt affects individuals from their early twenties to senior citizens aged 62 and older. Here is the table shows the distribution of student debt across different age groups, highlighting the average debt amounts for each category.

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What is the Average Student Debt Held by Americans?

The average student debt owed by Americans has been steadily increasing. Currently, the total student loan debt in the U.S. has surged by 66% over the past decade, reaching a staggering sum of over $1.77 trillion, as reported by the Federal Reserve.

Recent data from the 2020-2021 school year reveals that over half of bachelor's degree students who attended both public and private four-year institutions graduated with student loans. On average, these students left college with a debt burden of $29,100 in education loans, according to the College Board.

Furthermore, more than a quarter of Americans with student debt owe $10,000 or less. It's worth noting that under President Biden's now-defunct student debt relief plan, nearly 20 million borrowers would have had their student debts forgiven.

What is the Eligibility Criteria for Debt Cancellation in the Latest Round?

Regardless of the amount of debt owed, borrowers should be prepared to make payments on time. Financial aid expert Mark Kantrowitz recommends signing up for auto-pay, which facilitates automatic transfers of payments from your bank account to the loan servicer.

Interest will accrue on any unpaid loans, and borrowers may end up paying more than the original loan amount. The interest rate varies depending on when the loan was initially borrowed, and borrowers can obtain this information by logging into their loan servicer's website or visiting the government's official site. The latest round of debt cancellation includes several categories of borrowers:

$5.2 billion will be forgiven for approximately 53,000 borrowers who have worked in eligible public service fields such as teaching or the military for at least a decade.

Nearly $2.8 billion will go to around 51,000 borrowers through adjustments to income-driven repayment plans. These individuals have been in repayment for two decades or more and have finally reached the threshold of payments required for forgiveness.

An additional $1.2 billion will be allocated to almost 22,000 borrowers who have permanent disabilities and were identified through a Social Security data match.